PLUS commits to derivatives unit, after bid, departure

PLUS-DX, the derivatives platform unveiled by PLUS Markets earlier this year, was the subject of a takeover bid and also lost its managing director earlier this month, but the UK market operator said it remained committed to the business.

PLUS-DX, the derivatives platform unveiled by PLUS Markets earlier this year, was the subject of a takeover bid and also lost its managing director earlier this month, but the UK market operator said it remained committed to the business.

PLUS Markets rejected the approach for its majority stake in PLUS Derivatives Exchange received on 9 December on grounds that it was “unattractive at a strategic level” and undervalued both the current and potential value of the unit. “The other party was also seeking for PLUS to contribute significant resources and funding to PLUS-DX over a transitional period” following the proposed acquisition, PLUS added.

The firm also confirmed that Clive Connors, formerly managing director of PLUS-DX, had left the business after his contract was terminated on 19 December 2011. The departure is related to PLUS’s decision to revise PLUS-DX’s strategy “to facilitate its launch in the context of a financial crisis within the euro zone and worldwide economic uncertainty”.

Vijay Angelo, a derivatives expert of 20 years’ standing, has been appointed consultant to PLUS-DX but its parent “intends to recruit additional staff from inter-dealer broker backgrounds” to support its strategy for the unit.

PLUS-DX, which received regulatory approval from the Financial Services Authority in July, provides market participants with exposure to the interest rate swap (IRS) market via an exchange-tradable index known as the swap index contract (SIC), rather than trading over the counter.

The SIC – which is part of index provider FTSE’s Medium Term Interest Rate Swap family of indices – is designed to replicate the profit and loss profiles of the underlying US$ IRS market for tenors between two and 30 years.